Page 11 - TT mag Sept 2025 Digital Edition

UPDATE PLUS

Incentivising Vehicle Scrappage

n a recent automobile are recommended to be scrapped. In India, it is mandatory for all
manufacturer’s convention, the The policy further introduces vehicles to adhere to the Bharat
Minister for Road Transport incentives to scrap old vehicles, State VI (BS VI) emission norms.
Iand Highways, Nitin Gadkari, including discounts on the purchase The Vehicle Scrapping Rules
urged automakers to offer bonuses of new ones against a scrappage provides for setting up of vehicle
and discounts to consumers with certificate. scrapping facility (RVSF). It will
scrappage certificates. The benefits It could bring about two be responsible for carrying
of India’s vehicle scrappage policy important changes to India’s out dismantling and scrapping
could generate about `40,000 crore automotive sector: First, it operations and is required to have
in revenue for both the Centre establishes norms that regulate cyber security certifications as it
and states, while also significantly vehicle phase-out on a national will be having access to the central
reducing production costs for level with the potential to database of vehicle registration for
automakers. The policy is expected improve knowledge about vehicle verification purposes. The RVSF can
to create jobs, cut carbon dioxide retirements and to harmonise accept, and scrap vehicles registered
emissions and reduce dependence registration rules across states. in any of the Indian States or Union
on extracting scarce metals like lead, Second, the policy has the potential Territories.
platinum and palladium, making it to accelerate the formalisation of
a win-win for the economy, industry vehicle scrappage and recycling. In order to incentivise scrapping
and environment. A prerequisite for successful of old and unfit vehicles, the Vehicle
Scrapping Rules has incorporated
India’s Vehicle Scrappage Policy implementation of this policy is the provisions to allow a discount
took effect in April 2022. The availability of testing centre and on purchase of new vehicles,
objective of the government-funded scrappage yard capacity. if the older vehicle is offered
programme was to phase out old India is the fifth largest for scrapping. MoRTH has also
passenger and commercial vehicles manufacturer of commercial proposed certain amendments to
and thereby reduce urban air vehicles globally. With a sustained the CMV Rules to provide additional
pollution, increase passenger and demand and its growing share incentives to owners who scrap
road safety and stimulate vehicle in the global economy, the auto their vehicle. The amendment to
sales. The policy requires passenger industry also has a considerable CMV Rules provides a concession
vehicles older than 20 years and influence on other ancillary on motor vehicle tax on submission
commercial vehicles older than 15 industries such as steel, aluminium of certificate of vehicle scrapping
years to pass a “fitness and emissions and plastic. Vehicles scrappage and up to 25 percent for non-transport
test” to keep their registration. recycling of parts play an important vehicles and up to 15 percent for
Vehicles failing the mandatory test role in meeting demands of this transport vehicles
are defined as end-of-life vehicles, industry for raw materials and for Further, these concessions will
lose their registration certificate and controlling environmental pollution. be available up to eight years for
transport vehicles and up to 15
years for non-transport vehicles.
The amendment to the CMV
Rules further provides waiver of
registration fees for
new vehicles, with effect from
1st April 2022. These incentives are
expected to create a demand and
Image courtesy: Business Standard owners to scrap the old vehicles.
interest amongst heavy vehicles

Apart from availing the incentives,
owners of heavy vehicles will also
be able to have BS VI compliant
vehicles which can be beneficial in
the long run for both the owners
and environment.

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